4 Actionable Tips To Maintain Steady Financial Health

May 23, 2018 2 min read

The Pareto principle, or the 80/20 rule, suggests that roughly 80% of the effects come from 20% of the causes. Whether you’re an aspiring entrepreneur, established business person, a salaried worker, or just a professional, there are small things that you do in your daily life, which actually define the course of your future, without you even realizing it.

Now, if you bring your focus to the finances, it won’t be tough to agree that money is something extremely important in everyone’s life including yours. Are you doing a small something regularly that is affecting the larger course of your future financial health?

Think about it, with increased expenses, competing objectives, and limited income, financial stability is something that you need. In addition to being a need for a secure future, having in place, a good financial backup enables you to focus best on your current goals and achieve everything you’ve dreamt of. You must realize the fact that if you need to worry about everything, with the finances pulling you back each time, how can you freely do your best in what you desire?

Keeping this in mind, no matter what your income level may be, here are some actionable tips you can follow to stabilize your finances :

Stop Disregarding Budgeting

This does sound like the most clichéd piece of advice, yet is extremely important. Most people, especially the young, subconsciously assume that maintaining a budget isn’t necessary at all unless one is older or suspects an impending financial emergency. However, this thinking is by many thought to be flawed. Everyone must maintain a budget irrespective of their income levels on a regular basis.

Budgeting helps to gather an educated idea of where your money is actually going. This enables you to plan out expenditures, arrest unnecessary leakages and of course save. It’s well understood that with a proper budget, the chances of spending impulsively tend to decrease, which is often the reason behind most people’s dwindling bank balance. Hence, as a step, budgeting is one that should be followed.

Automate Your Savings

Another obvious point, savings. Let’s approach it this time by facing some truth. We are all well aware that saving is paramount to maintaining financial stability. However, long-term saving as a habit presupposes some willpower. It’s hard to isolate some extra money in the bank and actually prevent yourself from spending it on the many things you wish to own. Even if you do manage to start out with a disciplined habit of saving, it’s not difficult to be tempted and end up losing all that willpower to save.

In order to eliminate the chances of this natural tendency to take over you, you could enable automatic transfers from your checking account every month. As a fact, you could also automate your recurring payments to be more in control of your money. An additional advantage you can gain by making timely payments is an improved credit score. A word of caution here, be mindful of your balances before you start getting charged overdraft fees from the bank!

Start Investing Long Term, Right Away

Basic math testifies that the power of compounding is immense to achieve money growth over a long time horizon. In that sense, if you allocate some funds for the long-term today, they’re really likely to grow much more than investing the same amount a few years later. Therefore, building a balanced portfolio of different asset classes is always advisable to make handsome returns over the long term, and preventing your money from losing value due to continuous inflation.

Be Open To Reliable Innovations In Savings

Reality is, that it can get difficult for many people to barely meet their expenses. In that scenario, allocating money for the future seems like a distant dream. Even if you do have surplus funds to your credit, being able to invest that meaningfully, is something that your time might not allow you. In keeping with this reality, there are many financial products available these days that help people make great bite-sized investments. They are also completely effortless and reliable which is why you must be open to them.

In fact, it might interest you to learn that with some applications today, you could even invest your spare change in a well-managed portfolio of digital currencies. Yes, save and invest every single time you make a purchase, be it for grocery or coffee or anything. It’s non-intuitive to miss out on such lucrative and reliable options!

Frankly speaking, it’s always the small things in life that often make the biggest difference. No matter how uninteresting planning and investing in your financial health might seem today, you must be careful to do what it takes for a more comfortable, secure & regret-free tomorrow.